Brightspire Capital, Inc. · NYSE:BRSP
Brightspire Capital — Q3 2020 Earnings Presentation
39 slides from Brightspire Capital's earnings presentation, Nov 6, 2020
Slide 1: Supplemental Financial Report Third Quarter 2020
S U P P L E M E N TA L F I N A N C I A L R E P O R T THIRD QUARTER 2020 NOVEMBER 5, 2020 1
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This presentation may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and
Slide 3: Company Highlights
Credit REAL ESTATE COMPANY HIGHLIGHTS
Slide 4: Company Highlights
COMPANY HIGHLIGHTS Substantial commercial real estate credit REIT with conservative balance sheet Diversified Portfolio of Primarily Conservative Balance Sheet w/ Robust Liquidity Position Senior Loans & Net Lease Assets Embedded Financing Capacity $4.3B $609M $14.53 Total At-Share Assets Total Liqu
Slide 5: Third Quarter Update
THIRD QUARTER UPDATE • Net income of $5.0 million or $0.04 per share and Total Core/LNS Earnings of $39.7 million or $0.30 per share • Adjusted Core/LNS Earnings of $31.0 million or $0.24 per share, excluding gains/losses and a one-time tax benefit Financial • GAAP net book value of $1.7 billion or
Slide 6: Company Snapshot
COMPANY SNAPSHOT Investment Type Portfolio Overview Based on GAAP net book value as of September 30, 2020 LNS Portfolio Investment Carrying Net carrying 6% Count value value (6 ) Per Share Senior mortgage loans Core Portfolio Cash & net 28% assets(4) Senior mortgage loans 32 $ 1,981 $ 485 $ 3.68 31%
Slide 7: Financial Overview
FINANCIAL OVERVIEW Conservative leverage ratio and steady quarter-over-quarter book value per share Key Financial Metrics ($mm / Per Share) GAAP Adjusted* GAAP Undepreciated Net Income / (Loss) Core / LNS Earnings Core / LNS Earnings Net Book Value Book Value Core Portfolio ($2.7) / ($0.02) $24.1 /
Slide 8: Core Portfolio
Credit REAL ESTATE CORE PORTFOLIO
Slide 9: Core Portfolio – Overview
CORE PORTFOLIO – OVERVIEW Portfolio Summary Investment Type(1) Property Type(1) Based on GAAP gross carrying value as of September 30, 2020 Based on GAAP gross carrying value as of September 30, 2020 Total number of 71 investments CRE debt Preferred equity & Other / securities(3) other loans(4) mixe
Slide 10: Core Portfolio – Loans & Preferred Equity Portfolio Overview
CORE PORTFOLIO – LOANS & PREFERRED EQUIT Y PORTFOLIO OVERVIEW Overview West 47 Total number of investments 59% Northeast 23% Midwest 1% (1) Southwest $2.3 billion Total loans & preferred equity 11% Southeast Europe 3% 3% $49 million Average investment size Other(6) <1% % Senior loans floating rate I
Slide 11: Core Portfolio – Loans & Preferred Equity Portfolio Overview (Cont'd)
CORE PORTFOLIO – LOANS & PREFERRED EQUIT Y PORTFOLIO OVERVIEW (CONT’D) Number of Carrying Net carrying W.A. unlevered W.A. remaining W.A. extended (1) (2) (3) (4) investments value value all-in yield term (years) term (years) Floating rate Senior mortgage loans 31 $ 1,919,851 $ 424,278 5.6% 1.0 3.5
Slide 12: Core Portfolio – Net Lease Real Estate
CORE PORTFOLIO – NET LEASE REAL ESTATE Rentable W.A. % leased W.A. remaining Number of Number of Carrying Net carrying Annualized square feet (1) Q3'20 NOI (2) (3) at end of lease term investments properties value value Q3'20 NOI (4) (5) ("RSF") period (years) Industrial 2 24 7,359 RSF $ 380,537 $ 8
Slide 13: Core Portfolio – CRE Debt Securities
CORE PORTFOLIO – CRE DEBT SECURITIES Overview Ratings Category(4) (1) 19 Total number of investments BBB- 27% $244 million Principal value "B-Piece" Investments 65% $105 million Carrying value (2) $79 million Net carrying value BB | B 8% (3) 5.3 years W.A. remaining term Portfolio Activity Vintage(4
Slide 14: Core Portfolio – Investment Detail
CORE PORTFOLIO – INVESTMENT DETAIL Core Portfolio – loans & preferred equity portfolio Origination Carrying Coupon Cash Unlevered Extended Risk (1 ) (2 ) (3 ) date Collateral type City, State value type coupon all-in yield maturity date LTV ranking Senior loans Loan 1 Jun-19 Multifamily Milpitas, CA
Slide 15: Core Portfolio – Investment Detail (Cont'd)
CORE PORTFOLIO – INVESTMENT DETAIL (CONT’D) Core Portfolio – loans & preferred equity portfolio (cont’d) Origination Carrying Coupon Cash Unlevered Extended Risk (1 ) (2 ) (3 ) date Collateral type City, State value type coupon all-in yield maturity date LTV ranking Mezzanine loans Loan 33 * Sep-20
Slide 16: Core Portfolio – Investment Detail (Cont'd)
CORE PORTFOLIO – INVESTMENT DETAIL (CONT’D) Core Portfolio – CRE debt securities Principal Carrying W.A. remaining value value term (yrs) (1 ) CRE debt securities CRE debt securities (19 investments) $ 244 $ 105 5.3 Total / W.A. CRE debt securities $ 244 $ 105 5.3 Core Portfolio – summary Number of
Slide 17: Legacy, Non-Strategic Portfolio
LEGACY, NON-STRATEGIC PORTFOLIO 17
Slide 18: Legacy, Non-Strategic – Portfolio Overview
LEGACY, NON-STRATEGIC – PORTFOLIO OVERVIEW Portfolio Summary Investment Type(1) Property Type(1) Based on GAAP gross carrying value as of September 30, 2020 Based on GAAP gross carrying value as of September 30, 2020 Total number of 38 investments Senior PE interests Preferred equity(3) Hotel mortga
Slide 19: Capitalization
Credit REAL ESTATE CAPITALIZATION
Slide 20: Capitalization Highlights
CAPITALIZATION HIGHLIGHTS Since the first quarter, reduced recourse debt exposure by approximately $550 million to $171 million and reduced net debt-to-equity ratio from 1.4x to 1.1x Overview Capital Structure $4.1 billion Total capitalization CMBS credit (excluding cash) facilities Other debt 1% 2%
Slide 21: Capitalization Overview
CAPITALIZATION OVERVIEW Recourse vs. W.A. extended W.A. contractual W.A. all-in Outstanding Non-recourse (1) maturity (2) interest rate (2) COF (2)(3) debt (UPB) Corporate debt Corporate revolving credit facility Recourse Feb-23 L + 2.25% 2.40% $ - Investment-level debt Securitization bonds payable
Slide 22: Benefiting from Low Rates
BENEFITING FROM LOW RATES CLNC net interest income is well-protected and benefits from current low rates due to in-place LIBOR floors 97% of the total senior mortgage loan portfolio are floating rate (indexed to one-month USD LIBOR) 100% of the Core Portfolio floating rate senior mortgage loans
Slide 23: Appendix
Credit REAL ESTATE APPENDIX
Slide 24: Important Note Regarding Non-GAAP Financial Measures and Definitions
IMPORTANT NOTE REGARDING NON-GAAP FINANCIAL MEASURES AND DEFINITIONS We present Core Earnings/Legacy, Non-Strategic (“LNS”) Earnings, which are non-GAAP supplemental financial measures of our performance. Our Core Earnings are generated by the Core Portfolio and Legacy, Non- Strategic Earnings are g
Slide 25: Important Note Regarding Non-GAAP Financial Measures and Definitions
IMPORTANT NOTE REGARDING NON-GAAP FINANCIAL MEASURES AND DEFINITIONS The Company presents pro rata (“at share” or “at CLNC share”) financial information, which is not, and is not intended to be, a presentation in accordance with GAAP. The Company computes pro rata financial information by applying i
Slide 26: Notes Regarding Reportable Segments
NOTES REGARDING REPORTABLE SEGMENTS Colony Credit Real Estate, Inc. (“CLNC”, “Colony Credit Real Estate”, the “Company” or “We”) currently holds investment interests through the reportable segments below, which are based on how management reviews and manages its business. Each segment also includes
Slide 27: Appendix – Consolidated Balance Sheet
APPENDIX – CONSOLIDATED BALANCE SHEET S eptember 30, 2020 (Unaudited) December 31, 2019 Asset s Cash and cash equivalents $ 461,990 $ 69,619 Restricted cash 73,059 126,065 Loans and preferred equity held for investment 2,143,938 2,848,956 Allowance for loan losses (40,524) (272,624) Loans and prefer
Slide 28: Appendix – Consolidated Statements of Operations
APPENDIX – CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended September 30, 2020 2019 Net interest income Interest income $ 36,391 $ 46,991 Interest expense (13,426) (23,167) Interest income on mortgage loans held in securitization trusts 20,462 22,586 Interest expense on mortgage obligations
Slide 29: Appendix – Consolidated Statements of Operations by Segment
APPENDIX – CONSOLIDATED STATEMENTS OF OPERATIONS BY SEGMENT Three Months Ended S eptember 30, 2020 Core Portf olio Loans and Legacy, Non- pref erred CRE debt Net lease Total Core S trategic equity securities real estate Corporate Portf olio Portf olio Total Net interest income Interest income $ 36,3
Slide 30: Appendix – Outstanding Common Shares and OP Units
APPENDIX – OUTSTANDING COMMON SHARES AND OP UNITS As of As of September 30, 2020 June 30, 2020 Class A common stock 128,582,965 128,583,198 OP units 3,075,623 3,075,623 Total common stock and OP units outstanding 131,658,588 131,658,821 30 30
Slide 31: Appendix – Reconciliation of GAAP to Non-GAAP Financial Information
APPENDIX – RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION Reconciliation of consolidated balance sheet to at CLNC share balance sheet As of September 30, 2020 Total Core Portfolio Legacy, Non-Strategic Portfolio Consolidated NCI ( 1 ) At CLNC share ( 2 ) Consolidated NCI ( 1 ) At CLNC shar
Slide 32: Appendix – Reconciliation of GAAP to Non-GAAP Financial Information (Cont'd)
APPENDIX – RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION (CONT’D) Reconciliation of GAAP net book value to undepreciated book value As of September 30, 2020 Legacy, Non-Strategic Core Portfolio Portfolio Total GAAP net book value (excluding noncontrolling interests in investment entities)
Slide 33: Appendix – Reconciliation of GAAP to Non-GAAP Financial Information (Cont'd)
APPENDIX – RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION (CONT’D) Reconciliation of GAAP net income (loss) to Core Earnings / LNS Earnings Three Months Ended September 30, 2020 Legacy, Non- Core Portfolio Strategic Portfolio Total Net income (loss) attributable to Colony Credit Real Estat
Slide 34: Appendix – Reconciliation of GAAP to Non-GAAP Financial Information (Cont'd)
APPENDIX – RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION (CONT’D) Reconciliation of GAAP net income (loss) to NOI Three Months Ended September 30, 2020 Core Portfolio Legacy, Non-Strategic Portfolio Net lease Total Core Net lease Other Total LNS real estate Portfolio real estate real esta
Slide 35: Appendix – Footnotes
APPENDIX – FOOTNOTES Page 4 1. Represents cash-on-hand and availability under the corporate revolving credit facility as of 11/3/20 2. Represents cash-on-hand as of 11/3/20 3. Represents CLNC closing stock price as of 11/3/20 4. Net-debt-to-equity ratio based on CLNC’s share of total outstanding sec
Slide 36: Appendix – Footnotes (Cont'd)
APPENDIX – FOOTNOTES (CONT’D) Page 13 1. Investment count represents total number of tranches acquired; two total “B-piece” transactions 2. Represents carrying values net of any in-place investment-level financing at CLNC share as of 9/30/20 3. W.A. calculation based on carrying value at CLNC share
Slide 37: Appendix – Footnotes (Cont'd)
APPENDIX – FOOTNOTES (CONT’D) Page 32 1. Represents net accumulated depreciation and amortization on real estate investments, including related intangible assets and liabilities 2. The Company calculates GAAP net book value (excluding noncontrolling interests in investment entities) per share and un
Slide 38: Company Information
COMPANY INFORMATION Colony Credit Real Estate (NYSE: CLNC) is one of the largest publicly traded commercial real estate (CRE) credit REITs, focused on originating, acquiring, financing and managing a diversified portfolio consisting primarily of CRE debt investments and net leased properties predomi
Slide 39: Colony Credit Real Estate
ColonyCredit REAL ESTATE